MEDICARE (MEDIGAP) SUPPLEMENTS

INSURANCE – JULIA RUSCITTI – Seniors should routinely review their current health insurance plans to see if a Medicare supplement policy would be a good idea. If you have retired, and have insurance through your previous employer; you are often times finding that your current policies are frequently changing – and, not always for the good. Many include higher premiums and higher deductibles. When the premiums and/or deductibles get too high, Medicare supplement policies (combined with Part D coverage) become a more attractive option.

Seniors On June 1, 2010, the new Modernized Medicare Supplement Plans became available. Since Medicare supplement plans were standardized in 1992; there has not been a great deal of change to the plans – so the introduction of M and N was a welcome addition. Plans K and L were added; but did not seem to make a significant difference in the Senior Supplement market. Many believe Plans M and N (the new Modernized Medicare Supplement Plans) will have a significant impact on the options seniors now have in the Medicare Supplement arena – in particular the Medicare Supplement Plan N. Let’s look at the highlights of the two plans.

The Medicare supplement coverage under Plan M will feature 50% coverage of the Part A (Hospitalization) deductible. The 2012 the Part A deductible is $1,156. Therefore, the policy would cover $578, and the insured would pay the other $578. In addition, this Medicare supplement policy will not cover the Part B (Medical) deductible; which is $140 in 2012.

The second Medigap policy; introduced in 2010 was Plan N. This Medicare supplement plan also features cost sharing. However, on this Medigap plan, the Part A deductible is fully covered. The cost sharing is found on the Part B side. The $140 Part B deductible is not covered, and therefore paid for by the policyholder. In addition, the policyholder pays up to $20 co-pays for office visits and up to $50 co-pays for emergency room visits.

With the introduction of these two new plans (that feature cost sharing), many companies believe that Plan M will cost about 15% less than a *Plan F (the most common plan sold) and Plan N will cost about 30% less than Plan F. If you are considering a Medicare supplement health insurance plan; and have previously been on a Medicare Advantage Plan or an employer plan, these two new plans could prove to be an attractive alternative.

*On my next blog, we will review the most popular Medicare Supplement plan – Plan F. In addition, I will contrast that to the “High Deductible” Plan F.